Smart Money?

Question

Just i read one article that who makes money a bbbig i.e. smart money

so if we follow the actions of smart money we can too make big moneyyy.

Is there any one know more in details about smart money & how to trace it


regards




kedar

Answer 1

Following the smart money implies following the big money because big money drives the market, thus it's smart. ;-)

Basically, most retail investors don't trade enough to influence the market. Instead it's driven by the large institutions, pension funds, mutual fund managers, etc.

Unfortunately for them, it's not so easy to just put in an order for 2 million shares of a stock as it'd drive the stock through the roof. Thus it typically takes about 3 wks for these guys to get in and out of a position. That's where we have an advantage.

By following this money, we can get in while the buying is going on and rise with the tide.

How?

There are several sites that track institutional money flows. Investools, IBD, and Tompson are just a few. You'll also hear about such things on CNBC when you hear such phrases as sector rotation, etc.

For example, steel has been one sector getting money recently, so you might have noticed NUE, X, and STLD becoming some of the beneficiaries.

If you have other questions, please let me know.

Good luck!

Answer 2

if only I knew